Jump to ContentJump to Main Navigation
Private GovernanceCreating Order in Economic and Social Life$
Users without a subscription are not able to see the full content.

Edward Peter Stringham

Print publication date: 2015

Print ISBN-13: 9780199365166

Published to Oxford Scholarship Online: August 2015

DOI: 10.1093/acprof:oso/9780199365166.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in OSO for personal use (for details see www.oxfordscholarship.com/page/privacy-policy).date: 15 December 2018

Does Private Governance Work in the Most Complex Markets?

Does Private Governance Work in the Most Complex Markets?

Successful Risk Management on Wall Street Even in the Wake of the 2008 Economic Downturn

(p.165) chapter 11 Does Private Governance Work in the Most Complex Markets?
Private Governance

Edward Peter Stringham

Oxford University Press

Many advanced financial instruments are created because even the best courts are imperfect. Even if lenders cannot recover money from insolvent borrowers, default becomes less of a problem when default risk is accurately priced into interest rates or insured against using a credit default swap. Although many blame complex financial instruments such as credit default swaps for causing the 2008 economic downturn, this chapter makes the case that these instruments simply responded as designed to market conditions. Products designed to be safer were, and products designed to absorb losses did. Even in the midst of major credit events, private groups like the International Swaps and Derivatives Association helped ensure that most buyers of credit default swaps were paid what they were owed, and providers of third-party certification, administrator services, and custodian services helped secure investors’ property rights.

Keywords:   risk management, pooling default risk, pricing default risk, financial innovation, advanced derivative, third-party accounting, custodian service

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .